Archive for October 9th, 2009

Finally, a Rolls-Royce for the masses … well, kinda.

October 9, 2009

TakeAway:  Owning a Rolls-Royce is an undisputed symbol of wealth…and many would argue that the brand’s exclusivity is consumers’ primary motivation for purchasing and re-purchasing its cars.  Rolls Royce has decided to test the loyalty of its existing consumer base by offering a lower-priced version of its car and thus making the car attainable by a larger portion of society. Will this strategy backfire and alienate its existing loyal consumer base?

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Excerpted from WSJ, “Rolls-Royce Unveils its Economy Car” By  Vanessa Fuhrmans, September 17, 2009

… Rolls-Royce Motor Cars’ answer to the worst downturn in decades: Its new Ghost model, to be had for a mere $245,000 … Though the Ghost has the same hand-crafted interiors and famous grill, the sleeker and slightly shorter model costs about one-third less than the $380,000 starting price of the British car maker’s flagship Phantom.  As more people globally can afford a Rolls, though, the company faces a delicate balancing act: boosting sales while not diluting the brand’s exclusive cachet …

The Ghost’s launch comes at a critical time. Rolls-Royce sold a record 1,212 Phantoms last year. But as the economic downturn caught up with even the superrich, sales plunged 34% in the first half of this year, tarnishing what had been a bright spot for its German parent, BMW AG.  Meanwhile, Rolls faces growing competition for the lower rung of the upper crust from Bentley … Bentley sales have risen 10-fold … The success of Bentley’s Continental model (priced between $150,000 and $200,000) underscored the market to be had in the niche above Porsche and Mercedes-Benz but below Rolls-Royce …. 

The Ghost appears to be hitting the mark: Some 1,200 potential buyers have signaled “strong interest” or pledged to order one, about the same number of total Phantoms sold last year, the company said.  As the economy recovers, the car maker says it expects to sell at least 2,000 annually, boosting its total production nearly threefold.  The company has gone to great lengths to preserve the model’s Rolls-Royce quintessence, yet at a downsized price … Rolls-Royce … said 85% of the people who have expressed interest in the Ghost have never owned a Rolls, uncommon among Phantom owners. 

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Full Article
http://online.wsj.com/article/SB125312564687516787.html#mod=todays_us_nonsub_marketplace

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Posted in Mktg - Product Line Mgnt, Mktg - Segmentation | Leave a Comment »

Which is your scarcest asset: time or money?

October 9, 2009

TakeAway:  In today’s economy, motivating consumers to pull the trigger and purchase (now) is job one for most marketers. 

Sometimes, the answer may be as simple as changing the brand message to emphasize time instead of money … or vice versa.

If buyers are “experiential”, focus on time; if they’re “possessive”, focus on money.

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Excerpted Knowledge@Wharton, “Time vs. Money:  Analyzing Which One Rules Consumer Choices, ” September 16, 2009

Pick up a magazine or turn on the TV and prepare for a flood of marketing messages about how you spend your time and money … Yet with all this talk of time and money, little is known about how consumers’ attitudes and behaviors are influenced by a product’s association with these concepts …

A new paper … argues that when companies weigh whether to go for an ad campaign with a time or a money theme, they should be aware that each evokes strong reactions from consumers …

Emphasis on time … typically leads to more favorable consumer attitudes and purchasing decisions because … time is less fungible than money … and people feel less accountable for how they spend their time because it can be more difficult to measure than monetary outlays. These two characteristics — fungibility and ambiguity — are important differentiators in how consumers think about time and money …

When money matters … for the prestige possession, subjects reported greater feelings of personal connection when they were primed to recall the money spent on the product …  those who highly valued the mere possession of the product had more favorable attitudes when prompted to consider the money involved in the purchase … 

Ultimately, the researchers conclude: “Brands can cultivate consumer relationships by first considering how consumers most identify with the product (through experience or possession) and then highlighting either their time or money spent accordingly.” … 

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Full Article
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2341

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Posted in Mktg - Consumer Behavior, Mktg - Pricing, Mktg - Promotion | Leave a Comment »